Assume That Labor Productivity Growth Is Slower in the United

question 178

Multiple Choice

Assume that labor productivity growth is slower in the United States than in its trading partners.Given a system of floating exchange rates,the impact of this growth differential for the United States will be:

• A) Increased exports and an appreciation of the dollar
• B) Increased exports and a depreciation of the dollar
• C) Increased imports and an appreciation of the dollar
• D) Increased imports and a depreciation of the dollar